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Thursday, 11 August 2011 10:18
Louisiana Treas. Kennedy Says Prepare For Less Fed $, Show Me The Numbers On OGB
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John KennedyDuring the spring, Louisiana barely balanced its budget for this fiscal year given a 1.6 billion dollar shortfall in revenues.  One of the plans emerging from the session is Governor Jindal’s proposal to privatize the Office of Group Benefits (OGB).   

In part 2 of a 3-part Bayoubuzz interview, Louisiana Treasurer John Kennedy discusses a need to reassess the budget in light of the recent Standard & Poors downgrade of the U.S. credit rating and other related-events. Also, Kennedy discusses Governor JIndal’s proposal to privatize OGB.

  (Interviewer asked whether Treasurer Kennedy  anticipates any change in the Louisiana budget given the recent events involving the downgrade including the Federal  Reserve’s decision to maintain low interest rates for two years and whether we should do anything different than what we since  approving the budget, this past spring.)

Well, this is what I think we ought to do.  I think we need to look at every program in State government that is funded in whole or in part with federal dollars and start preparing for the very real possibility that the Federal government will send fewer federal dollars to us and we need to prioritize those programs. We need to ask how we can do them more efficiently.  We need to ask ourselves how we can save money.  We need to ask ourselves whether we even need the program  because it is clear to me that the markets are telling the President and the Congress you have a spending problem which has led to a debt problem;  get it under control, spend less.  And, now, they don’t have to make the reduction in spending in terms of aid to the states but my guess is everybody will share and probably there will be less money in the near and longer term sent to the states and we need to be prepared for that possibility.  

Recording 1

 (Interviewer asks Treasurer Kennedy about the privatizing of the Office of Group Benefits (OGB) which has been promoted by the Jindal Administration)

I want to see the numbers.  You know, privatization can work but it is a product of the numbers.

I don’t worship at the altar of privatization.  If the numbers make sense, if it can be done cheaper by the private sector we ought to do it; if it can’t we shouldn’t.  And they have released no studies, no estimates,  it’s just sort of “trust me”.  I think the legislature would like to see the numbers and I don’t blame them.  I can’t be for or against it until I see whether there will be savings.

(Interviewer and Kennedy then agree that a contract has not been signed by the Jindal administration to proceed with the privatization study and Treasurer Kennedy then says)

But Stephen, it’s just like selling the prisons.  You know, the Governor wanted to sell the prisons.  Well, why?  Well, he said to save money.  Well, so what’s the numbers?  The numbers weren’t there.   And, I mean it makes no sense to privatize something unless you can do it cheaper.  Now, if it can be done cheaper by the private sector we certainly ought  to look at it, but you don’t just do it in hope it will be done cheaper;you have to see the numbers.     

by Stephen Sabludowsky, Publisher of Bayoubuzz.com

Recording 2

Part I: 
Treas. John Kennedy Talks Impact Of S & P Credit Rating Downgrade On Louisiana, U.S.

Related:
Future Of Louisiana Office Of Group Benefits--League Luncheon

S&P downgrade may cause trickle-down to local govt.

Do you agree or disagree with Treasurer John Kennedy?

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